Worked on encasing Egyptian god in precious stone (7)
I believe the answer is:
diamond
'precious stone' is the definition.
(diamond is a kind of precious stone)
'worked on encasing egyptian god' is the wordplay.
'worked on' becomes 'did' (I've seen this in another clue).
'encasing' means one lot of letters goes inside another.
'egyptian god' becomes 'amon' (Amon is an example).
'did' placed around 'amon' is 'DIAMOND'.
'in' acts as a link.
(Other definitions for diamond that I've seen before include "one of thirteen?" , "Playing card - baseball playing-field" , "Carbon gemstone" , "shape" , "Small type" .)