Ok folks.. long story short, I was developing on a computer that I no longer have access to. I was able to retrieve the source code, but not the .keystore file used to sign
Yes, you can release an update to existing app with a new key!
Google now allows you to upload the new key to existing app by requesting them to reset it through email/live chat in Google Support.
This process takes 1-2 business days.
I followed this process and uploaded an update to the same app with a new key. Google Play Store technical team helped me to reset the previous key.