Monster, terribly amused (6)
'monster' is the definition.
(Medusa is an example)
'terribly amused' is the wordplay.
'terribly' indicates an anagram.
'amused' is an anagram of 'MEDUSA'.
(Other definitions for medusa that I've seen before include "all her visitors got stoned", "Hideous female", "Mythical woman with snakes for hair", "Form of jellyfish", "Gorgon killed by Perseus - jellyfish".)