The most common and most likely answer to this crossword clue is the 8 letter word MADHOUSE
I've seen this crossword clue in The Times
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More clues leading to the result MADHOUSE
- Think about mostly improvised state of chaos
- Asylum once accommodated retiring individual after initial confusion
- . Psychiatric unit wolfed down rodent, Spooner says
- I will leave young lady building asylum
- State of uproar in duma, so he agitated
- Drunk had somehow bumped into rodent in unruly residence
- . Mouse had run helter-skelter in lodging for nutcases
- Rodent had run wild inside causing bedlam
- Rodent had got loose inside, causing scene of utter confusion
Buddy explains!

The straight part
We know that "Asylum once" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case asylum once = madhouse.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.
What does MADHOUSE mean?
MADHOUSE noun- A house where insane persons are confined; an insane asylum.
- (by extension) A chaotic place.