Fancy me being found in a broken chair (7)
I believe the answer is:
chimera
'fancy' is the definition.
(chimera can mean a fancy or delusion)
'me being found in a broken chair' is the wordplay.
'being found in' indicates putting letters inside.
'a broken' indicates an anagram.
'chair' is an anagram of 'chira'.
'me' put inside 'chira' is 'CHIMERA'.
(Other definitions for chimera that I've seen before include "wild dream" , "Wild or impossible idea" , "Mythical monster, part lion, goat and serpent" , "fantasy" , "Idle fancy" .)