Hi All,
This is my attempt to explain myself!
The clue is phrased in such a way as to misdirect your attention, rather like a conjurer, away from the route to solve it. Firstly, you should pretty much ignore the punctuation. Next put look and out together as one word. Ignore the suggestion of being dishevelled or ill in 'you are in such a state'. What the words can now be seen to be saying is, 'The state you will be in as a lookout is on watch'.
(Dk13 put it much more succinctly, but then I think he/she is much more of a wordsmith than me.)
Sorry to take so long to explain, Noisette, mt, elliemay,
Kind regards,
CJR