One dug out new underground room (7)
I believe the answer is:
dungeon
'room' is the definition.
(I know that dungeon is a type of room)
'one dug out new' is the wordplay.
'out' indicates anagramming the letters (out can mean wrong or inaccurate).
'new' becomes 'n' (common abbreviation eg NT for New Testament).
'one'+'dug'='onedug'
'onedug' with letters rearranged gives 'dungeo'.
'dungeo'+'n'='DUNGEON'
'underground' is the link.
This may not be right. It may belong to another bit of the clue.
Can you help me to learn more?
(Other definitions for dungeon that I've seen before include "Prison cell, often underground" , "Underground prison-cell" , "Keep" , "Dark underground cell for prisoners" , "old prison" .)