Anyways, I am looking for some tips/comments anyone might have in dealing with situation and a comment on my bust out hand. 7 Players left---4 spots. Blinds are 1K/2K/150 ante. With 16K, I am the shortstack but there are three players in the 20's.

You have an M of 4 (I finally read Harrignton's second book). You need to look for any opportunity to get your money into the pot -- all of your money into the pot -- with a probable +EV situation. This is a satellite, though. This means you might consider a more conservative approach if you can slip into fourth. In this case, you are the small stack so unless the table is wild, it looks like you are going to have to increase your chip count by entering a pot. I will go with my first thought, get my money in when I think conditions look favourable.

I was in the SB and get Q-9 offsuit. It folds around to me and I jam obviously hoping the BB will fold or that I have two live cards or possibly two overs to a small pocket pair. BB has about 22K so I thinking he won't come over the top w/o a legit hand. He thinks for awhile and calls with KQoffsuit and I am dominated and sent packing. Was this the correct play? Or should I have just folded and waited for a better hand? (although I don't have too much time left).

This is, in my mind, a very close situation.

Factors that favour moving in:

(1) Your low M of 4.
(2) Q-9o is probably the best hand.
(3) You have enough chips that this will put a lot of pressure on him to fold.

Factors that favour folding:

(1) You will get five cheap hands to hope that others bust or that you find a better opportunity.
(2) Hands with a Q as the top card are hands that will be in big trouble if called. This point is based on a series of trials against hands that I think represent the typical calling range of a typical opponent in situations like this. A lot of his possible hands will dominate a hand like Q-9 IF IF IF he calls.

On balance I think I would have moved in. Five cheap hands is not going to be enough to bust three more players and then you will be the blind again. Ugh. And, you have what is very probably the best hand.

Given what you knew, I think moving is was the right play. You are on the bubble and most players will be too tight. However, as it turned out he was willing to call with a hand as weak as K-Q. That's unpleasant. This players my not be too tight as predicted. If he is willing to call with a hand as weak as K-Q then our steal equity is probably not as much as we thought. Hindsight, however.