Just use floats, they should work with FOP. The structure you are looking to create should be something like this:
<fo:block>
<fo:float float="start">
<fo:block margin="0pt" color="red" text-depth="0pt" font-size="62pt" line-height="40pt" font-weight="bold" font-family="Courier">F</fo:block>
</fo:float>loats dimensions derived from its content width/height, accompanying text should wrap around floating block. Drop capital in this paragraph implemented using side float that contains fo:block with single big letter "F". Floats dimensions derived from its content width/height, accompanying text should wrap around floating block. Drop capital in this paragraph implemented using side float that contains fo:block with single big letter "F".
</fo:block>
See http://www.renderx.com/usecasestest.html "creating drop capitals using side floats"
Used this test file and FOP 2.5, the result is:

There is no need for any extensions to any FO formatter to accomplish this, as long as they support floats.