Where does the FLP impossibility proof depend on allowing a single process failure?
The part of the original paper's proof that requires node failure to prove the impossibility is case 2 of lemma 3. This case assumes that there is a "finite deciding run from C0 in which p takes no steps". p taking no step means it has died/failed. 

From case 1 of lemma 3, we know that there exists a pair of messages, called e and e' which affect the decision process, and if they are received by different nodes (p and p') the nodes will decide on different values. This means that these "important messages" must be received by a single node p only.

Case 2 tests this further with the possibility that node p, the recipient of the "important messages", fails (or "takes no steps"). If a "totally correct in spite of one fault" algorithm exists, it needs to tolerate the scenario where node p fails after configuration C0. Of course, p might just not fail, and the algorithm must be correct in both scenarios: p failing and p not failing.

Since the algorithm must decide on some value, if p is failing it has to proceed through some run called sigma and arrive at a deciding configuration A.

The problem here is that if p is actually still functional, it will accept e and e' and decide on its own. As we know from case 1, node p can decide on 0 (e arriving before e') or decide on 1 (e' arriving before e). So node p is making a decision on its own with no regard for what the rest of the nodes (through sigma) are deciding and ultimately there will be a case where the 2 set of nodes decide on different values.

As for your proof, since p takes no steps (it dies after C0), it invalidates your definition of a 0-admissible run.