This setter's over the hill — a serious difficulty (7)
I believe the answer is:
impasse
'a serious difficulty' is the definition.
(an impasse is a difficulty or stoppage)
'this setter's over the hill' is the wordplay.
'this setter's' becomes 'Im' (I am - referring to the crossword setter).
'over the hill' becomes 'passe' (I've seen this in another clue).
'im'+'passe'='IMPASSE'
(Other definitions for impasse that I've seen before include "Stand-off, stalemate" , "nothing can be done" , "Situation in which progress is impossible" , "Deadlock or stand-off" , "No progress is possible in this type of situation" .)