I tried what you describe (workbook attached onto a live Excel file on a network drive that is published on server). It allows me to edit and save the Excel and then when I hit refresh within the Tableau Server rendering, it updates the data within the viz. And we have "refresh less often". I tried it both with embedded and published datasources with no issue.
1. I use UNC path (i.e. ORD-TBLxxx\scripts\book1.xlsx) to point at my workbook. My server run-as user has full access to this path.
2. When publishing, I uncheck "include external files".
3. Test it out with a brand new workbook and an Excel file that you know is not being used. This will eliminate any possibility of one of your teammates inadvertently having the Excel open on their desktop unknowingly getting in the way.
Thanks for the feedback Jeff! I will try those suggestions today, and will follow up on this discussion.