Lovely morning in squirrel's home (6)
I believe the answer is:
dreamy
'lovely' is the definition.
(I've seen this before)
'morning in squirrel's home' is the wordplay.
'morning' becomes 'am' (as in dr:00 AM).
'in' indicates putting letters inside.
'squirrel's home' becomes 'drey' (I can't justify this - if you can you should believe this answer much more).
'am' inserted inside 'drey' is 'DREAMY'.
Can you help me to learn more?
(Other definitions for dreamy that I've seen before include "Fantastic" , "Descriptive of the music of a nocturne" , "With a pleasantly unreal quality" , "like a midsummer night?" , "quite impractical" .)