The King lives - that's crazy! (5)
I believe the answer is:
elvis
'the king' is the definition.
(I have seen 'The King' mean 'elvis' so perhaps 'king' could also mean 'elvis')
'lives that's crazy' is the wordplay.
'that's crazy' indicates an anagram.
'lives' is an anagram of 'ELVIS'.
(Other definitions for elvis that I've seen before include "The familiar King of rock music" , "Singer, 1935-77" , "Much-impersonated singer, d. 1977" , "Lives for rock'n'roll king" , "Singer Presley" .)