Mythological monster - illusion (7)
I believe the answer is:
chimera
This clue is a double definition.
'mythological monster' is the first definition.
(I've seen this before)
'illusion' is the second definition.
(I've seen this before)
(Other definitions for chimera that I've seen before include "Wild notion" , "Each rim (anag) - foolish fancy" , "Illusory goal; monster" , "Illusion" , "Fire-breathing female monster" .)