A two-time Grand Slam champion, Hewitt had left hip surgery in August. The Australian reached the semifinals last week in Memphis, Tenn.
The tournament was planning to give Hewitt a birthday cake on the court before he lost.
"I'm trying to play more tournaments to get into the routine to playing back-to-back matches,'' said Hewitt, who won the 1999 Delray Beach title. "Obviously, it's going to take time to get back to your best after any kind of surgery.''
Top-seeded Mardy Fish, who grew up just an hour away in Vero Beach, moved into the second round with a 7-5, 6-3 victory over Frank Dancevic.
"I had a good sense I was going to be (the top seed) a few weeks out and it certainly doesn't happen every week for me,'' Fish said.
"There seems to be a No. 1 jinx everywhere. I'd like to break that, but I have some hurdles before then to clear.''
Marco Baghdatis also advanced with a 7-5, 6-2 upset of third-seeded Ernests Gulbis.
Hewitt failed to take advantage of a break point in the opening game of the third set. Hewitt recouped an early service break in the 18-point fifth game, but lost the next three games.
"I was just a little bit better,'' Lu, of Taiwan, said. "I didn't feel any pressure because he's one of the best players in the world, so I just played my best tennis.''
Seventh-seeded Jeremy Chardy of France outlasted 2006 Delray champion Tommy Haas of Germany 7-6 (7), 6-3. Qualifier Evgeny Korolev upset fellow Russian and fourth-seeded Igor Kunitsyn 6-4, 7-6 (3).
Vince Spadea of the United States rallied from 2-6, 0-3 down to defeat Denis Gremelmayr of Germany 2-6, 7-5, 6-1.
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