Jeff, thanks for the reply. You are correct, I should have used the "raw" format in my example, my fault.
After carefully reading the documentation, I realized that by default the "validate" is set to True. In my case ,the database that I was trying to re-point the layer file did not exist yet. This syntax now works:
lyr.findAndReplaceWorkspacePath("", workPathNew, False)
or
lyr.findAndReplaceWorkspacePath(workPath, workPathNew, False)
Eric