A tough spot - deep stacked 2-5 NL

[krammatrix]

Probably should be in small stakes, but here i go anyways. Villain in this hand is a very loose and tricky player who bluffs way too much and isn't good. He had about 300 in front of him, everyone i had about 600 and everyone else had about that much. Everyone limped to me on the button, I limped with 5s7s, sb completes bb checks. Flop came 5 7 8 rainbow. EP bets 20, mp calls, villain raises to 120. I didn't think that he would have made that bet with a straight or a set, but put him on a pair/draw type hand. I raised to 300. Comments?