Full Tilt Limit Omaha Hi/Lo, $1.00 BB (6 handed) - Full-Tilt Converter Tool from FlopTurnRiver.com

Preflop: Hero is UTG with K, A, J, 4
Hero calls, MP calls, CO raises, 1 fold, SB calls, BB calls, Hero calls, MP calls

Flop: (10 SB) 9, K, 4 (5 players)
SB checks, BB checks, Hero bets, 1 fold, CO raises, SB 3-bets, 1 fold, Hero folds, CO calls

Turn: (8.5 BB) 2 (2 players)
SB bets, CO calls

River: (10.5 BB) 2 (2 players)
SB checks, CO bets, 1 fold

Total pot: $10.50 (10.5 BB) | Rake: $0.50

Reads.... everyone is playing pretty loose... sb seems retarded

Also... the wtf involved is the sb folds on the river with $0.05 behind.

So is folding 2 pair correct here?

I think you really need to raise or fold pre-flop. Flopping 2 pair 5-way isn't a reason to do backflips. Flopping 2 pair against 2-3 opponents can be a very profitable experience against a couple LAGs. I would not fault you for folding UTG, but I would fault you for not raising once you decide to play.

As a side note, folding that river with little left behind is the right play if all you have is a busted A3 low and no kicker for your Ace high, even getting 500-1.