Mother's in the outhouse, drunk! (7)
I believe the answer is:
smashed
'drunk' is the definition.
(thesaurus)
'mother's in the outhouse' is the wordplay.
'mother's' becomes 'mas' (ma is a kind of mother).
'in the' is an insertion indicator.
'outhouse' becomes 'shed' (I've seen this before).
'mas' inserted within 'shed' is 'SMASHED'.
(Other definitions for smashed that I've seen before include "bust?" , "Broke; drunk (colloq.)" , "Broken in pieces" , "Vandalised" , "Affected by drug" .)