Highly literate source looking embarrassed about answer (4-4)
I believe the answer is:
well-read
'highly literate' is the definition.
(I've seen this before)
'source looking embarrassed about answer' is the wordplay.
'source' becomes 'well' (well is a kind of source**).
'looking embarrassed' becomes 'red' (I've seen this before).
'about' indicates putting letters inside.
'answer' becomes 'a' (abbreviation eg in Q and A).
'red' going around 'a' is 'read'.
'well'+'read'='WELL-READ'
(Other definitions for well-read that I've seen before include "Highly literate" , "Scholarly" , "Literarily knowledgeable" , "Having good book knowledge" , "Having learnt a lot from books" .)