here are two suggestions. I hope this helps.
1. When publishing, uncheck the include external files option on the publish dialog. When you do this, it should not include your Excel data as part of the workbook.
2. Refer to the path of your Excel workbook that is stored on TS as a UNC path. In order to do this, you will probably need to create a share on your server that can be referenced via the UNC path. In my case, I created a share on the scripts\serveradmin on my G drive and then it's referenced with \\servername\scripts\ServerAdmin\TableauAdminData\excel.xls
3. ok, there's a 3rd suggestion too. Don't save your Excel to the Tableau Server directory, bad idea. Because the next upgrade you do, this file will be wiped out. Rather, save it somewhere like D:\blah\blah\data\excel.xls
Thanks. #2 did the trick.
On #3, I've always saved some of my working files in the 'bin' directory knowing full well that this wasn't the best place to save them. When I'd upgrade Tableau Server, I just made a copy of these files and put them back in the new 'bin' directory after the upgrade. Guess now would be as good a time as any to get those files moved somewhere else.