Easy Laydown?

I got myself in a jam with queens in a 1/2 nl live game. I told you I would share the bad with the good so here's the bad.

I'm sitting in middle position at a 7-handed table. There is a straddle in play. An extremely aggressive player raises the straddle from under the gun to 12. I look down and see a lovely QQ in my hand. The players in this game love to see a flop for anything under 20 bucks so I can count on two or three callers behind me if I just call so I raise it on up to 35 to try and isolate. I get an unwelcome re-raise to 70 from the big blind who is one of the tighter players at the table. Everyone else folds out and it's me and him. I put him on one of three hands here; AA, KK, or AK suited and I'm leaning heavily on AA. That puts 124 in the pot and it costs me 35 more to call with another 88 behind. Mathematically I don't have the odds to call that range of hands and it should be an easy lay down, right? I called...and of course the flop is jack high rainbow. I check and he throws out 35 or so. I'm still thinking AA but maybe he has AK, right? I push all in. He calls and shows me the AA...................busted....sigh

So here's my question. Would it have been best to raise it up and then fold to the re-re-raise preflop or just call the original raise? I'm thinking I needed to re-raise somewhere around the amount that I did to define the hand and I just failed to lay it down when he "told me" what he had.