How to wrap existing object instance into DispatchProxy?

You are right that there is no other option here than to cast the generated IFoo to the known proxy type (FooProxy) and use a custom method or property on FooProxy. There is no public API to add constructor arguments or return the proxy as the implementation type. However, DispatchProxy.Create() will return an instance of a subclass of FooProxy whose type is generated at runtime via reflection and IL emitting.

If you are looking at other ways to quickly wrap an implementation and replace interface methods / virtual methods, I suggest using mocking frameworks instead (FakeItEasy, Moq, NSubstitute etc.).

You need to create your own Generic class that inherit from DispatchProxy and has own static Create that has an extra parameter from type target.

example

public class AopAction<T>:DispatchProxy
{
  #region Private Fields
  private Action<MethodInfo,object[],object> ActAfter;
  private Action<MethodInfo,object[]> ActBefore;
  private Action<MethodInfo,object[],Exception> ActException;
  private T Decorated;
  #endregion Private Fields

  #region Public Methods
  public static T Create(T decorated,Action<MethodInfo,object[]> actBefore = null,Action<MethodInfo,object[],object> actAfter = null,Action<MethodInfo,object[],Exception> actException = null)
  {
    object proxy = Create<T,AopAction<T>>();
    SetParameters();
    return (T)proxy;
    void SetParameters()
    {
      var me = ((AopAction<T>)proxy);
      me.Decorated = decorated == default ? throw new ArgumentNullException(nameof(decorated)) : decorated;
      me.ActBefore = actBefore;
      me.ActAfter = actAfter;
      me.ActException = actException;
    }
  }
  #endregion Public Methods

  #region Protected Methods
  protected override object Invoke(MethodInfo targetMethod,object[] args)
  {
    _ = targetMethod ?? throw new ArgumentException(nameof(targetMethod));

    try
    {
      ActBefore?.Invoke(targetMethod,args);
      var result = targetMethod.Invoke(Decorated,args);
      ActAfter?.Invoke(targetMethod,args,result);
      return result;
    }
    catch(Exception ex)
    {
      ActException?.Invoke(targetMethod,args,ex);
      throw ex.InnerException;
    }
  }
  #endregion Protected Methods
}

to use your example

var proxy=AopAction<IFoo>.Create(new FooImpl());