Madness of Dane, with time, deranged (8)
I believe the answer is:
'madness' is the definition.
'dane with time deranged' is the wordplay.
'with' means one lot of letters go next to another.
'deranged' indicates an anagram.
'danetime' with letters rearranged gives 'DEMENTIA'.
'of' acts as a link.
(Other definitions for dementia that I've seen before include "Detain me, having disease of old age" , "Chronic memory failure" , "Detain me in distressed state of old age" , "Disorder of mental processes caused by brain disease" , "Persistent mental disorder, perhaps due to age" .)