Bhargav,
It will be more straightforward to use a map package that already references your data rather than modifying the data sources of a running service as your code and the shapefile sample do. I tested using a pre-authored map package today and that works with a file geodatabase as a data source. Doing it this way avoids the signal problem that you encountered.
Author a map package with ArcMap, with a map referencing the layers in the file geodatabase. Be sure to specify that the data should support Runtime and the the data should be referenced and not embedded in the map package. Then, create a local service with that map package. Later, you can modify the data in the file geodatabase without changing the map package.
I found that this works well using ArcMap 10.2.2 to author the map package. I found that there is a problem in 10.3 that only allows you to embed the data in the map package. This problem is fixed for 10.4. Embedded data could be viable if you write a GP script to refresh your map package at desired intervals.
