We usually blacklist IPs address with iptables. But in Amazon EC2, if a connection goes through the Elastic Load Balancer, the remote address will be replaced by the load balancer's address, rendering iptables useless. In the case for HTTP, apparently the only way to find out the real remote address is to look at the HTTP header HTTP_X_FORWARDED_FOR. To me, blocking IPs at the web application level is not an effective way.
What is the best practice to defend against DoS attack in this scenario?
In this article, someone suggested that we can replace Elastic Load Balancer with HAProxy. However, there are certain disadvantages in doing this, and I'm trying to see if there is any better alternatives.
I think you have described all the current options. You may want to chime in on some of the AWS forum threads to vote for a solution - the Amazon engineers and management are open to suggestions for ELB improvements.