Davis will be replaced in the field by Mike Reid, a two-time winner on the PGA Tour. Reid, who is competing in his first Senior Open, turned 50 earlier this month and played last week at the Senior British Open, where he tied for 57th.
Schroeder, who will miss the event due to an Achilles tendon injury, is being replaced by Frank Conner, who competed in sectional qualifying. Conner, who is playing in his eighth Senior Open, last played in this event in 2002. His best finish came in 1999 when he tied for eighth.
The duo join Andy North and Jim Colbert, who withdrew this past week.
North, a two-time U.S. Open champion, withdrew citing a pair of injuries and was replaced in the field by Chuck Milne.
North, who won the U.S. Open in 1978 and 1985, pulled out of the tournament with knee and back ailments.
Colbert, who tied for fourth in 2001, withdrew due to a hip injury. Colbert, the 1992 runner-up to Larry Laoretti, was replaced by Terry DeLeo.