Full Tilt Poker
Pot Limit Omaha Ring game
Blinds: $0.10/$0.25
5 players
Converter

Stack sizes:
UTG: $22.45
CO: $65.90
Button: $34.10
SB: $30.40
Hero: $24.65

Pre-flop: (5 players) Hero is BB with T 7 3 8
UTG calls, CO calls, Button calls, SB calls, Hero checks.

Flop: J 9 5 ($1.25, 5 players)
SB checks, Hero checks, UTG bets $1.25, CO raises to $3.25, 2 folds, Hero folds??

Should I lead out? Flat call now? Raise it up?

Definitely a good fold. You only have 5 nut outs and it's likely that at least one of the other players has some kind of straight draw.

Good fold.