Cuckoo — bird seen before end of May (5)
I believe the answer is:
'cuckoo' is the definition.
'bird seen before end of may' is the wordplay.
'bird' becomes 'loon' (loon is a kind of bird).
'seen before end of may' becomes 'y' (I can't explain this - if you can you should give a lot more credence to this answer).
Can you help me to learn more?
(Other definitions for loony that I've seen before include "Crazy" , "Nuts" , "mad" , "Silly" .)