Carbon Poker - $1/$2 - Limit Holdem - 8 players

MP+1: $47.63
CO: $20.78
BTN: $122.38
SB: $7.27
BB: $56.77
UTG: $35.29
UTG+1: $19.23
Hero (MP): $21.33

SB posts SB $0.50, BB posts BB $1.00

Pre Flop: ($1.50) Hero has A Q

Perhaps I should not have played these cards to begin with. I was having a good night, the table seemed a little soft, and I figured, what the heck, it's good enough under the circumstances to see the flop.

fold, fold, Hero calls $1.00, MP+1 raises to $2.00, CO calls $2.00, fold, SB raises to $3.00, fold, Hero calls $2.00, MP+1 calls $1.00, CO calls $1.00

Flop: ($13.00, 4 players) 3 3 A

So now I'm thinking, I have top pair, it's aces, and a queen kicker. Worth raising. The board does not look good for my opponents; hard to imagine a flush or straight draw.

SB bets $1.00, Hero raises to $2.00, fold, CO calls $2.00, SB calls $1.00

Turn: ($19.00, 3 players) 4

Now I'm feeling even more confident. My ace pair with a queen kicker seems to be the best hand (actually two pair, including the pair of threes on the board).

SB checks, Hero bets $2.00, CO raises to $4.00, fold, Hero raises to $6.00, CO raises to $8.00, Hero calls $2.00

When the CO raised me, I figured he had a pocket pair worse than mine, maybe jacks or tens.

River: ($35.00, 2 players) 7

I'm still thinking the board is fairly dry and I have the best hand. Sure, a straight could be made with 25 or 56. But the blinds have folded. Why would anyone be playing either one of those hands?

Hero bets $2.00, CO raises to $4.00, Hero calls $2.00

I took the CO's raise to be a semi-bluff. I figured he still had nothing more than some non-ace pair, and that he figured me for having the same. I thought, well, he's raising me because he figures I have doubts as to whether I really have the highest pair. But I wasn't positive, so I just called, instead of raising him back.

What would you have done? Was it wrong to even play the AQo to begin with? And having played them, was I reasonable in my assessment of what followed?

I'm happy to post the exciting conclusion, if there is sufficient interest.