Hide cereal grabbed by crazy king (8)
I believe the answer is:
goatskin
'hide' is the definition.
(I know that goatskin is a type of hide)
'cereal grabbed by crazy king' is the wordplay.
'cereal' becomes 'oats' (type of cereal).
'grabbed by' is an insertion indicator (inserted letters are grabbed inside).
'crazy' is an anagram indicator.
'king' with letters rearranged gives 'gkin'.
'oats' placed inside 'gkin' is 'GOATSKIN'.
(Other definitions for goatskin that I've seen before include "Hide Billy or Nanny" , "Type of leather - a song kit (anag)" , "Billy's hide?" , "Leather from nanny or billy?" , "Leather - wine holder of old" .)