How do the fish win?

I was playing in an awesome 40/80 Friday night @ Oceans-11, yet I still lost 5+ racks. Normally I would quit playing after losing 3 racks, but this game was just awesome. We were playing 40/80 with overs and the whole table was overs, meaning we were really playing 40/80/160. Preflop the blinds were still 20 and 40, and the bets were still in $40 increments, but after that the bets were 80 & 160. Plus the whole table was agreeing to do a live $80 straddle. Here was the lineup as I remembered it:
Seat 1: forgot
Seat 2: Sean from UCSB. A big LAG who knows how to play postflop and isn't afraid to sling his chips into the pot. Not the easiest spot in the lineup.
Seat 3: Charlie, reasonable player, a bit on the weak tight side, but has his moments of spew.
Seat 4: Doc Jose, total fish. Plastic surgeon from Tijuana. Plays everything and anything, unafraid to run a bluff or call you down light.
Seat 5: Forget his name, but a young marine looking guy. Also a bit on the loose side, snapped me off on a one-outer that I will tell you about in a bit.
Seat 6: Lam. Another very loose player, who can't hand read worth at all. I've seen him willingly put in multiple bets drawing dead/thin.
Seat 7: Chris, another total fish.
Seat 8: Bruce, total fish, but is dangerous since he doesn't fold and is willing to open raise very loosey goosey. Snapped me off twice, once to put me on total tilt, and the final one sent me home.
Seat 9: me. I've got 3-fish to my right, and only Sean & Charlie I have to worry about to my left.

Doesn't matter, I still lost 5+ racks.

I lost to a 1-outer for the 3rd time ever in my life during this session. In the 40/80 must move game, seat 5 from above posted in the cut-off. I open-raised UTG+3 with pocket jacks. Sean called, he called, plus the blinds 4-way to the flop. Flop comes A47 two clubs. I hate the flop, but I bet, planning on folding if raised. All call. Turn is off suit jack. check-check-bet-fold-raise-fold-reraise-cap. River was a 4. bet-2bet-3bet-4bet-call. From the action preflop I knew he didn't have pocket aces. Which left him with pocket 4's or pockets 7's. They way I played it I could have had pocket aces, and when he 4-bet I knew I was in trouble. Even so, I have the 3rd nut hand, only two hands beat me. I call hating it, expecting to see quads, and yep he has pocket 4's for rivered quads and a 1-outer. ARGH, I hate poker.

At the main game with the juicy lineup I described above, Bruce twice killed me. One he opens with Q2s in the cutoff and I 3-bet him from the button with AK. No worries flop comes 224. That hand put me on tilt. The sword-inducing hari-kari final hand of the night comes when he opens from UTG with 42o, I 3-bet him with AK, everybody cleared out and he called. Flop comes KJ2 rainbow. I bet and he called. Turn was a blank, and I bet my last 12 chips. He almost mucked and then said ok, I'll donate. River was 4, for bottom two which was good. Sickening, I was taking horrible beats all night like that.

For the 3rd quarter of the year I am down a sickening $8800 in only 34 hours of play. I've got a long ways to go to reach my goal of averaging $40 an hour for the last 6 months of the year. No doubts in my mind that I can do it, it's just going to be a long grind unfortunately.