PREVIOUS ADVICE 
I am currently writing my thesis in theoretical particle physics at Arizona State University. When I began doing research, opportunities for researchers interested in biophysics were only really on the experimental side. Although I find experimental work very exciting, I found my love for computational and analytical work overwhelming, so I decided to pursue another area of physics instead of biophysics.
Now there are many more opportunities for graduate students to do theoretical work in biophysics, and I would like to move into this field. But I really can't just quit what I?m doing right now, having spent three years on it, and start a research project in an entirely different area. I've discussed some of these issues with a few of the professors at ASU, and they think I just need some time to be trained before moving on to a full postdoc position. The only problem is, of course, how do I find funding for this retraining? I've heard of "retraining" grants offered by the NIH. My questions for you are: Are these retraining grants offered to someone in my situation? If so, how do I apply? Are there any other grants that might be available? Any help you can give me will be much appreciated. Thanks in advance.
It's gratifying--and relatively rare--to have the opportunity to answer a question where the opportunities are as rich as they are in theoretical biology. Training more scientists with deep mathematical expertise in the biological sciences is a national priority. As a theoretical physicist with an interest in biology you are ideally positioned to make the jump. If you're good, they will love you.
In recent years, senior scientists, administrators, and policy makers in the biological and biomedical research communities have begun to realize the great potential of applying advanced quantitative approaches to a wide range of biological issues. They have also begun to identify the impediments to making the transition from traditional mathematics and quantitative fields into biology and the biomedical sciences, and to create new programs--mainly funding programs--aimed at helping accomplished quantitative scientists make the switch.
Before getting into funding programs, let's consider your short-term strategy. It would, as you suggest, be foolish to abandon three years of hard work in theoretical physics, but you would be equally foolish to continue to limit yourself to that field. Your advisors propose pre-postdoc retraining and seem to be suggesting some sort of formal training program. I believe, however, that your next big career transition ought to be into a fulltime postdoc.
My advice is that as you continue to work on your particle physics project, you seek opportunities to learn and work in areas that interest you, and in which you hope eventually to be working fulltime. You could start by getting in touch with experts in these fields; you're very fortunate that your institution has a vibrant theoretical and mathematical biology research community, centered on the Mathematical and Theoretical Biology Institute (MTBI). Take full advantage of it. Go and meet these people and attend the seminars and short courses they offer. Your ultimate objective: a publication or two in respected journals--in your new field--before you defend your dissertation. An informal advisor/mentor in theoretical biology would be a great help.
Ideally, you ought to be able to work this in to your schedule without compromising your particle-theory work. Allow yourself a bit more time to complete your Ph.D. if necessary. Hopefully you can accomplish this without seeking additional support; it's hard to imagine an NSF program officer taking grave exception to your efforts to retrain yourself in a field of high national need, even if it's not precisely on target for the research grant you're being paid from. A fellowship, if you have one, gives you even more freedom. Alternatively, perhaps a faculty member in theoretical biology would be willing to pay a part of your postdoc stipend, in exchange for a few hours of your theoretical expertise each week.
The person most likely to object is your Ph.D. advisor, who may feel that she's not getting her money's worth, for lack of a gender-neutral pronoun. Her cooperation is thus essential --you need a simple nod from her giving you permission to spend some of your time reading the mathematical and theoretical biology literature, educating yourself, and (eventually) doing original work in the field. So work with your advisor and be diplomatic.
If this approach fails then you'll be forced to make a formal training adjustment. This would lead you to the same result, I would think, but is likely to be much harder to pull off. Any predoc fellowship application you write is likely to require fulltime effort, which would mean making a commitment to abandoning your existing Ph.D. project. So if you can manage it, it's best to sit comfortably in that gray area for a while as long as no one makes a fuss.
With this additional insight and experience, what?s next? A good postdoc position with an accomplished scientist doing important work in theoretical biology. This is a well-funded area, so you shouldn't have any problem, at least at first, finding a laboratory that's willing to pay you a reasonable "employee postdoc" salary. This will give you time to develop, with your new advisor, a detailed research and training plan that will serve as the foundation for a strong fellowship or training-grant application.
Have a look, for example, at the Burroughs Wellcome Fund's (BWF) Career Awards at the Scientific Interface . "These grants," says BWF, "are intended to foster the early career development of researchers with backgrounds in the physical/computational sciences whose work addresses biological questions and who are dedicated to pursuing a career in academic research." Sounds like a good fit to me. BWF's career awards may be the most generous training awards extant, paying out $500,000 over a period of five years, and they are among the most prestigious.
The award is made when you've been in your postdoc for at least a year and are intended to span the chasm between the postdoc and your first tenure-track faculty appointment. The amount I've mentioned above pays for up to two years of postdoc expenses followed by three years of faculty support once you've found that elusive permanent job ... and, very likely, with a BWF Career award on your CV (and at least $300K of independent support left) you're likely to find that permanent job less elusive. Naturally, an award this rich and prestigious is also highly competitive. But with a strong quantitative background and a couple of years to prepare, you ought to be able to put together a strong application. Deadlines for these awards occur annually, in early May.
What about NIH? First off, a postdoctoral Kirschstein National Research Service Award  will work just fine once you've finished your Ph.D. NIH prefers to award these NRSAs to postdoc projects that involve a completely new, well-designed training program, so even though they aren't designed specifically for people making major changes of direction, you would still make an excellent candidate...assuming, of course, that the proposed work is related to human health and disease.
The dedicated awards you've heard about are the K-25s , aka the Mentored Quantitative Research Career Development Awards. Most K awards are intended for older, more settled researchers, but not so the K-25s. They, too, would be an excellent fit for you.
Says NIH in the program announcement: "The award is intended for investigators at any level of experience, from the postdoctoral level to [the] senior faculty level, who have shown clear evidence of productivity and research excellence in the field of their training, and would like to expand their research capability, with the goal of making significant contributions to behavioral, biomedical (basic or clinical), bioimaging, or bioengineering research." Seventeen NIH institutes offer K-25 awards, which last from 3 to 5 years and pay as much as 100% of an equitable salary and up to $40,000 per year for research costs, training, professional travel, and other expenses. You will be the PI on a K-25, but you must find a mentor, who, with you, will design a compelling training plan.