Embarrassed sailor by a shack (7)
I believe the answer is:
abashed
'embarrassed' is the definition.
('abash' can be a synonym of 'embarrass')
'sailor by a shack' is the wordplay.
'sailor' becomes 'ab' (abbreviation for able seaman).
'by' is a charade indicator (letters next to each other).
'shack' becomes 'shed' (I've seen this before).
'ab'+'a'+'shed'='ABASHED'
(Other definitions for abashed that I've seen before include "shamed" , "Ill at ease" , "Made embarrassed" , "Confused and embarrassed" , "Disturbed" .)