Dismay when old Oscar mounted horse (9)
I believe the answer is:
appaloosa
'horse' is the definition.
(Appaloosa is an example)
'dismay when old oscar mounted' is the wordplay.
'dismay' becomes 'appal' (synonyms).
'when' becomes 'as'.
'old' becomes 'o' (common abbreviation eg in OE for Old English).
'oscar' becomes 'o' (phonetic alphabet: alpha, bravo, charlie etc.).
'mounted' says the letters should be written backwards.
'as'+'o'+'o'='asoo'
'asoo' in reverse letter order is 'oosa'.
'appal'+'oosa'='APPALOOSA'
(Another definition for appaloosa that I've seen is " Horse breed, with spotted rump".)