Is it possible to use flex components in flash at all?
Yes, it is possible, in theory, but I expect it to be tedious and difficult. You'll have to do all your framework initialization manually. That means you'll have to do things like setup the SystemManager class manually.
Honestly, I don't know everything that the Flex Compiler / Application tag does to setup the Flex Framework. You may have to compile a simple Flex app with the 'keep' attribute and review the generated code to make sure you mimic that in your Flash Pro code.
Some reference information can be found here, here, and here.
The error you're seeing is odd; because a Flex Component must extend UIComponent and UIComponent extends DisplayObject. I wonder if you are missing a SWC library in your class path somehow and Flash pro is unable to tell that TestComp is actually a DisplayObject.