If it is a blind war, anything's possible... agreed that some TAGs can play like this with top pair, but I think it's a fold. Yeah it sucks to lose $35 on this, but chances are he's got you. 98, 96, or one of three sets are all probable, he definitely likes his hand or his chances of you folding.

Did you lay down some hands in similar circumstances? Did you guys have bad blood before this? How were you perceived? If you think he viewed you as a bit of a pushover at times, then I would consider firing back at him.