Warning: Open source to update values (error message

[kucker64]

I have two documents that both live on the same shared drive. Both documents are in Excel .xlsx format. One document (we'll call it #1) references cells within a second document (what we'll call document #2). Doc #2 is automatically updated on server every morning, but unfortunately, I'm only able to export it in .xls format. I then have to open the file & save in .xlsx format. Initially the link worked fine & updated correctly.

However, when re-opening the document, (whether Doc#1 is configured to automatically update links or not) or attempting to refresh, the values do not update.
o When I go to "Data > Edit Links" the status initially shows as "Unknown".
o If I click "Check Status" the status shows "Warning: Values not updated".
o If I click "Update Values" the status changes to "Warning: Open source to update values".
o If I either Open document #2, or select "Change Source" and reselect the source document (document #2) the values update.

Any ideas on this? Right now every time a user in document #1 wants to update their links, they have to open document #2 to update links.
I've read this error is usually related to linking files with different Excel formats, but should not be an issue in this case, as both files are in .xlsx format when attempting to update. Any insight appreciated.