It looks like it is trying to make a Proxy out of a Core Spring MVC object. Why, I am not sure.
But typically in MVC applications, you create two different ApplicationContexts. One for just the web layer components, and one for the middle tier. Your Service and AOP should be in the middle tier. Create a file called applicationContext.xml put it in your WEB-INF directory. Do the component-scan and aop autoproxy in that file. Add in your web.xml the xml for adding the Spring ContextLoaderListener. This will create the middle tier application context.
For your DispatcherServlet, create an xml file called <<<XXX>>>-servlet.xml where the <<<XXX>>> is replaced with the servlet name you give your DispatcherServlet entry in your web.xml. Place this file also in the WEB-INF directory and only include your web layer beans. and <mvc:annotation-driven/>
Also in your middle tier xml you don't need both <context:annotation-config/> and <context:component-scan.../> component-scan includes all the beans you get with annotation-config. So by putting in annotation-config, you are just adding redundancy