How do you play this with the snowmen?

40k on PP. I've been pretty quiet. Picked up a few hands to win a few small pots. Short stack has been pretty aggressive and is desperate. Should I re-raise here to isolate? What do I make of the limp re-raise? Can I fold half my stack here?
***** Hand History for Game 3203064413 *****
150/300 Tourney Texas Hold'em Game Table (NL) (Tournament 18286268) - Wed Dec 14 23:47:27 EST 2005
Table $40K Guaranteed(539417) Table 15 (Real Money) -- Seat 8 is the button
Total number of players : 9
Seat 1: rickstirg (1555)
Seat 2: altonham (3157)
Seat 4: FLOPSSEA (4776)
Seat 5: gnl1956 (2380)
Seat 6: Domenique82 (640)
Seat 7: Tirtis (375)
Seat 8: tomstern (1460)
Seat 9: FGators26 (1775)
Seat 10: Merkler (5807)
FGators26 posts small blind (75)
Merkler posts big blind (150)
** Dealing down cards **
Dealt to FGators26 [ 8s, 8h ]
rickstirg folds.
altonham folds.
FLOPSSEA calls (150)
gnl1956 folds.
Domenique82 folds.
Tirtis raises (375) to 375
Tirtis is all-In.
tomstern folds.
FGators26 raises (725) to 800
Merkler folds.
FLOPSSEA raises (1075) to 1225
FGators26 raises (975) to 1775
FGators26 is all-In.
FLOPSSEA calls (550)
Creating Main Pot with $1275 with Tirtis
Creating Side Pot 1 with $2800 with FGators26
** Dealing Flop ** : [ 2c, 9s, 3h ]
** Dealing Turn ** : [ Qs ]
** Dealing River ** : [ 3c ]
** Summary **
Main Pot: 1275 | Side Pot 1: 2800 |
Board: [ 2c 9s 3h Qs 3c ]