I think it's not working because python sees / as an escape character. It turns /0 into a special character (that's show up odd in your attribute table). I couldn't find an easy and functional solution. As much as I hate to say so, the easiest fix might be to just use vb script instead of python:arcpy.CalculateField_management(outFileThree, "HOTLINK", "LCase( [HOTLINK] )", "VB", "")
Let me know how it goes!