For silverlight only IP address can be used for server address when using proxy.
Usage example:
var connectionInfo = new PasswordConnectionInfo("1.2.3.4", "username", "password", ProxyTypes.Socks4, "127.0.0.1", 8088);
using (var ssh = new SshClient(connectionInfo))
{
ssh.Connect();
var rrr = ssh.RunCommand("ls -l");
}