Source of distress overwhelming woman's spirit (7)
I believe the answer is:
banshee
'spirit' is the definition.
(spirit in Irish mythology)
'source of distress overwhelming woman's' is the wordplay.
'source of distress' becomes 'bane' (as in the bane of someone's life).
'overwhelming' means one lot of letters goes inside another.
'woman' becomes 'she'.
'bane' enclosing 'she' is 'BANSHEE'.
(Other definitions for banshee that I've seen before include "'Wailing woman, warns of impending death (7)'" , "Death-portending spirit" , "Howler" , "Gaelic spirit" , "no one wishes to hear" .)