xargs doesn't recognize bash aliases

Since only your interactive shell knows about aliases, why not just run the alias without forking out through xargs?

find . -iname '.#*' -print0 | while read -r -d '' i; do foobar "$i"; done

If you're sure that your filenames don't have newlines in them (ick, why would they?), you can simplify this to

find . -iname '.#*' -print | while read -r i; do foobar "$i"; done

or even just find -iname '.#*' | ..., since the default directory is . and the default action is -print.

One more alternative:

 IFS=$'\n'; for i in `find -iname '.#*'`; do foobar "$i"; done

telling Bash that words are only split on newlines (default: IFS=$' \t\n'). You should be careful with this, though; some scripts don't cope well with a changed $IFS.

Using Bash you may also specify the number of args being passed to your alias (or function) like so:

alias myFuncOrAlias='echo'  # alias defined in your ~/.bashrc, ~/.profile, ...
echo arg1 arg2 | xargs -n 1 bash -cil 'myFuncOrAlias "$1"' arg0
echo arg1 arg2 | xargs  bash -cil 'myFuncOrAlias "$@"' arg0

This doesn't work because xargs expects to be able to exec the program given as its parameter.

Since foobar in your case is just a bash alias or function there's no program to execute.

Although it involves starting bash for each file returned by find, you could write a small shell script thus:

#!/bin/bash
. $(HOME)/.bashrc
func $*

and then pass the name of that script as the parameter to xargs