The most common and most likely answer to this crossword clue is the 8 letter word MISHEARD
I've seen this crossword clue in Financial Times
M
I
S
H
E
A
R
D
More clues leading to the result MISHEARD
- Sadly his dream is incorrectly taken in
- Wrongly understood, his dream distorted
- His dream broken, as was 1D by Hardy?
- Spies did initially capture barber! Wrongly caught?
- European in crock on motorway is picked up mistakenly
- Wrongly perceived young woman in front of crowd, speaking
- Didn't quite catch the crumbling of his dream
Buddy explains!

The straight part
We know that "Wrongly understood" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case wrongly understood = misheard.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 MISHEARD mean?
MISHEARD verb- To hear wrongly.
- To misunderstand.