Source of steel block fool contaminated with copper (8)
I believe the answer is:
damascus
'source of steel' is the definition.
(as in Damascus steel)
'block fool contaminated with copper' is the wordplay.
'block' becomes 'dam' (damming is a kind of blocking).
'fool' becomes 'ass' (both can mean a stupid person).
'contaminated with' indicates putting letters inside (some letters get contaminated with others).
'copper' becomes 'Cu' (chemical symbol).
'ass' placed around 'cu' is 'ascus'.
'dam'+'ascus'='DAMASCUS'
(Other definitions for damascus that I've seen before include "St Paul was converted on the road to this Syrian city" , "Couple" , "Pauline conversion on the road to here" , "capital city" , "Syrian capital" .)