Disaster of town taking a hit (8)
I believe the answer is:
calamity
'disaster' is the definition.
(I've seen this before)
'town taking a hit' is the wordplay.
'town' becomes 'city' (I've seen this in other clues**).
'taking' is an insertion indicator.
'hit' becomes 'lam' (to 'lam' means to hit hard).
'a'+'lam'='alam'
'city' placed around 'alam' is 'CALAMITY'.
'of' acts as a link.
(Other definitions for calamity that I've seen before include "distress" , "Disaster for wild west Jane" , "Musical set in Deadwood" , "Event resulting in great loss and misfortune" , "Damaging event" .)