In poor health and expired taking the waters (8)
I believe the answer is:
'in poor health' is the definition.
'expired taking the waters' is the wordplay.
'expired' becomes 'died' ('die' can be a synonym of 'expire').
'taking' is an insertion indicator.
'the waters' becomes 'seas' (sea is a kind of water).
'died' enclosing 'seas' is 'DISEASED'.
'and' acts as a link.
(Other definitions for diseased that I've seen before include "Unhealthy" , "Unsound" , "Unwell" , "Affected with illness" , "Infected, ill" .)