Monster, terribly amused (6)
I believe the answer is:
medusa
'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 "Monster" , "Amused like Greek Gorgon" , "Form of jellyfish" , "Gorgon of Greek myth" , "Mythological gorgon" .)