I'm generally a no-limit player, and I decided to play micro-limit on Absolute Poker earlier. The following hand came up in which I had the nuts on the turn but I was rivered by a pretty poor play. What mistakes did I make in this hand, other than get rivered?

Should I have re-raised on the flop with my two overcards and a gutshot to the nuts, or should I have not been in the hand to begin with holding KQo? I was fairly sure my hand was best pre-flop, as these guys were maniacs, as is evidenced by JWG three-betting K8o and Billybully cold-calling preflop with 39.

Stage #111230183: Holdem Normal $0.02/$0.04 [ 2005-04-14 20:36:05 ]
Seat 2 - BILLYBULLY $0.42 in chips
Seat 4 - JWG73 $2.04 in chips
Seat 5 - DAN HOLE $1.98 in chips
Seat 6 - BEKIM $1.09 in chips
*** BLIND [dealer 6] ***
BILLYBULLY - Post small blind $0.01
JWG73 - Post big blind $0.02
DAN HOLE - Pocket [Ks,Qc]
DAN HOLE - Raises $0.02 to $0.04
BEKIM - Folds
BILLYBULLY - Calls $0.03
JWG73 - Raises $0.02 to $0.06
DAN HOLE - Calls $0.02
BILLYBULLY - Calls $0.02
*** FLOP [Jc,7s,9d] ***
BILLYBULLY - Bets $0.02
JWG73 - Calls $0.02
DAN HOLE - Calls $0.02
*** TURN [Jc,7s,9d,10c] ***
BILLYBULLY - Bets $0.04
JWG73 - R! aises $0.04 to $0.08
DAN HOLE - Raises $0.08 to $0.12
BILLYBULLY - Calls $0.08
JWG73 - Raises $0.04 to $0.16
DAN HOLE - Calls $0.04
BILLYBULLY - Calls $0.04
*** RIVER [Jc,7s,9d,10c,2c] ***
BILLYBULLY - Bets $0.04
JWG73 - Raises $0.04 to $0.08
DAN HOLE - Raises $0.08 to $0.12
BILLYBULLY - Calls $0.08
JWG73 - Raises $0.04 to $0.16
DAN HOLE - Calls $0.04
BILLYBULLY - Calls $0.04
*** SHOW DOWN ***
JWG73 - Show cards [8h,Kd]
DAN HOLE - Show cards [Ks,Qc]
BILLYBULLY - Show cards [3c,9c]
*** RESULT ***
Total Pot($1.20) Rake ($0.06)
Board [Jc,7s,9d,10c,2c]
BILLYBULLY - Total ($1.14) HI$1.14)Flush, jack high [3c,9c - B:Jc,B:10c,P:9c,P:3c,B:2c]
JWG73 - HI:Straight, seven to jack [8h,Kd - B:Jc,B:10c,B:9d,P:8h,B:7s]
DAN HOLE - HI:Straight, nine to king [Ks,Qc - P:Ks,P:Qc,B:Jc,B:10c,B:9d]
BEKIM - Folded on the POCKET CARDS

Losing a 30BB pot to a guy playing like this really stings