Musical item is set in Washington (4)
I believe the answer is:
disc
'musical item' is the definition.
(a disc of recorded music)
'is set in washington' is the wordplay.
'set in' is an insertion indicator.
'washington' becomes 'dc' (Washington DC).
'is' put inside 'dc' is 'DISC'.
(Other definitions for disc that I've seen before include "Layer of cartilege between vertebrae" , "Thin flat circular object" , "Thin circular plate, as in CD" , "Flat, circular plate - record" , "jockey may be after" .)