Did impression of Prior - keenly observed (8)

I believe the answer is:

monkeyed

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'did impression' is the definition.
Although both the answer and definition are past participle verbs, I don't understand how one could define the other.

'prior keenly observed' is the wordplay.
'prior keenly' becomes 'monk' (I am not sure about this - if you are sure you should believe this answer much more).
'observed' becomes 'eyed' (I've seen this before).
'monk'+'eyed'='MONKEYED'

'of' acts as a link.

Can you help me to learn more?

I've seen this clue in The Independent.

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