Pot sweetener goes wrong

[Bad Lobster]

In this hand, there are all kinds of reasons to think villain has nothing. But it also looks like a good way for Hero to lose all his money on a lousy pair of sevens...what do you think of the way pot odds and stack sizes worked out?

Game is $5-200 spread limit with 2-3-5 blinds ($10 total). Table is fairly tight with no obvious fish but a lot of loose limping preflop (note that this blind structure encourages 3 blind players to play). Hero has been taking shots at pots but folding to aggressive action and recently showed down a hand where he made a continuation bet with nothing but JQ overcards (and caught a Queen on the river)--in other words, he's been asking to get slapped down.

Hero: $265 button
Villain: $500 UTG+4

Hero: 7[img]/images/graemlins/diamond.gif[/img]7 [img]/images/graemlins/club.gif[/img]

4 players (including villain) call $5

Hero raises to $10
4 callers, villain raises to $40
limper folds
Hero calls
other limpers fold

pot: $135

Flop: K [img]/images/graemlins/club.gif[/img] 9 [img]/images/graemlins/heart.gif[/img] 4 [img]/images/graemlins/diamond.gif[/img]

Villain bets $40
Hero calls

pot $215

Hero has $185 left

Turn: 3 [img]/images/graemlins/heart.gif[/img]

Villain bets $40
Hero ???

[raze]

Fold flop, you aren't going to improve and he's probably going to keep firing.