Grand cooker? That's mad! (4)
I believe the answer is:
'mad' is the definition.
'grand cooker?' is the wordplay.
'grand' becomes 'g' (G is short for grand as in a thousand).
'cooker?' becomes 'aga' (I've seen this before).
'that's' acts as a link.
(Other definitions for gaga that I've seen before include "In repetitive slang, senile or crazy" , "US singer Lady ___" , "In senile dotage" , "Queen's radio recording" , "crackers" .)