We present optical and X-ray observations of the afterglow and host galaxy of the short-hard GRB 060121 .
The faint R-band afterglow is seen to decline as t ^ { -0.66 \pm 0.09 } while the X-ray falls as t ^ { -1.18 \pm 0.04 } , indicating the presence of the cooling break between the two frequencies .
However , the R-band afterglow is very faint compared to the predicted extrapolation of the X-ray afterglow to the optical regime ( specifically , \beta _ { \mathrm { OX } } \sim 0.2 ) , while the K-band is consistent with this extrapolation ( \beta _ { \mathrm { KX } } \sim 0.6 ) , demonstrating suppression of the optical flux .
Late time HST observations place stringent limits on the afterglow R-band flux implying a break in the R-band lightcurve .
They also show that the burst occurred at the edge of a faint red galaxy which most likely lies at a significantly higher redshift than the previous optically identified short-duration bursts .
Several neighboring galaxies also have very red colors that are similarly suggestive of higher redshift .
We consider possible explanations for the faintness and color of the burst .
Our preferred model is that the burst occurred at moderately high redshift and was significantly obscured ; however , it is also possible that the burst lies at z > 4.5 in which case the faintness of the R-band afterglow could be attributed to the Lyman-break .
We discuss the implications that either scenario would have for the nature of the progenitors of short bursts .