From my experience, this kind of overbet is often a weak hand or draw that doesn't want a call rather than something that has you beat. Accordingly, I would raise his flop bet because the flush draw is well within his range.

As played, I can't fold to that ridiculous overbet, if he made the flush then I pay him I think. If he made the flush on the turn (unless it's a very weak flush), why would be try to blast you out of the pot with a shove? Most $6.50 players would check or bet tiny here.